What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-06-11 compared with 2025-12-11 · 190 added, 291 removed, 431 unchanged (53% of the section changed)

9 unchanged sentences

Operating lease right-of-use assets

Tradenames, trademarks and other intangible assets—net

Goodwill and intangible assets—net

Deferred tax assets

1 unchanged sentence

Other non-current assets

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable and accrued expenses

6 unchanged sentences

Term loan B-2—net

Real estate loans—net

Real estate loan—net

Non-current operating lease liabilities

4 unchanged sentences

Commitments and contingencies (Note 13)

Stockholders’ equity (deficit)

Preferred stock—$ 0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding as of November 1, 2025 and February 1, 2025

Common stock— $ 0.0001 par value per share, 180,000,000 shares authorized, 18,776,949 shares issued and outstanding as of November 1, 2025;

18,726,116 shares issued and outstanding as of February 1, 2025

Stockholders’ equity

Preferred stock—$ 0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding as of May 2, 2026 and January 31, 2026

Common stock— $ 0.0001 par value per share, 180,000,000 shares authorized, 18,900,769 shares issued and outstanding as of May 2, 2026;

18,818,976 shares issued and outstanding as of January 31, 2026

Additional paid-in capital

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Accumulated deficit

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

Total stockholders’ equity

Total liabilities and stockholders’ equity

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

FINANCIAL INFORMATION

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

THREE MONTHS ENDED

NINE MONTHS ENDED

(in thousands, except share and per share amounts)

6 unchanged sentences

Total other expenses

Income before taxes and equity method investments

Income tax expense

Income before equity method investments

Share of equity method investments (income) loss—net

Weighted-average shares used in computing basic net income per share

Basic net income per share

Weighted-average shares used in computing diluted net income per share

Diluted net income per share

Income (loss) before income taxes and equity method investments

Income tax expense (benefit)

Loss before equity method investments

Share of equity method investments net (income) loss

Net income (loss)

Weighted-average shares used in computing basic net income (loss) per share

Basic net income (loss) per share

Weighted-average shares used in computing diluted net income (loss) per share

Diluted net income (loss) per share

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

4 | 2025 THIRD QUARTER FORM 10-Q

FINANCIAL INFORMATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED

NINE MONTHS ENDED

(in thousands)

Net income (loss)

Net gain (loss) from foreign currency translation

Comprehensive income

Comprehensive income (loss)

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

FINANCIAL INFORMATION

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2026 FIRST QUARTER FORM 10-Q | 5

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

5 unchanged sentences

(in thousands, except share amounts)

Balances—August 2, 2025

Stock-based compensation

Vested and delivered restricted stock units

Exercise of stock options

Net loss from foreign currency translation

Balances—November 1, 2025

Balances—August 3, 2024

Balances—January 31, 2026

Stock-based compensation

2 unchanged sentences

Exercise of stock options

Settlement of convertible senior notes

Net loss from foreign currency translation

Balances—November 2, 2024

6 | 2025 THIRD QUARTER FORM 10-Q

FINANCIAL INFORMATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (continued)

NINE MONTHS ENDED

COMPREHENSIVE

STOCKHOLDERS'

INCOME (LOSS)

EQUITY (DEFICIT)

(in thousands, except share amounts)

Balances—February 1, 2025

Stock-based compensation

Issuance of restricted stock

Vested and delivered restricted stock units

Exercise of stock options

Net gain from foreign currency translation

Balances—November 1, 2025

Balances—May 2, 2026

Balances—February 1, 2025

Stock-based compensation

Issuance of restricted stock

Vested and delivered restricted stock units

Exercise of stock options

Settlement of convertible senior notes

Net gain from foreign currency translation

Balances—November 2, 2024

Balances—May 3, 2025

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

FINANCIAL INFORMATION

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2026 FIRST QUARTER FORM 10-Q | 6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED

THREE MONTHS ENDED

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

Non-cash operating lease cost

Stock-based compensation expense

Asset impairments

Stock-based compensation

Non-cash finance lease interest expense

Product recall

Deferred income taxes

Share of equity method investments (income) loss—net

Share of equity method investments net (income) loss

Distribution of return on equity method investment

9 unchanged sentences

Current and non-current operating lease liabilities

Other non-current obligations

Other non-current liabilities

Net cash provided by operating activities

1 unchanged sentence

Capital expenditures

Acquisition of business

Equity method investments

5 unchanged sentences

FINANCIAL INFORMATION

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

NINE MONTHS ENDED

THREE MONTHS ENDED

(in thousands)

3 unchanged sentences

Repayments under term loans

Repayments under real estate loans

Repayments of convertible senior notes

Debt issuance costs

Principal payments under finance lease agreements—net of tenant allowances

Repurchases of common stock—inclusive of excise taxes paid

Proceeds from exercise of stock options

Tax withholdings related to issuance of stock-based awards

Net cash provided by (used in) financing activities

Other financing activities

Net cash used in financing activities

Effects of foreign currency exchange rate translation on cash

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents

6 unchanged sentences

FINANCIAL INFORMATION

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4 unchanged sentences

We offer merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and baby, child and teen furnishings.

As of November 1, 2025, we operated a total of 73 RH Galleries and 43 RH Outlet stores, one RH Guesthouse, one RH Interior Design Office and 14 Waterworks Showrooms throughout the United States, Canada and Europe.

As of May 2, 2026, we operated a total of 75 RH Galleries and 43 RH Outlet stores, one RH Guesthouse, one RH Interior Design Studio and 14 Waterworks Showrooms throughout the United States, Canada and Europe.

We also have sourcing operations in Shanghai.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared from our records and, in our senior leadership team’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary to fairly state our financial position as of November 1, 2025, and the results of operations for the three and nine months ended November 1, 2025 and November 2, 2024.

The accompanying unaudited interim condensed consolidated financial statements have been prepared from our records and, in our senior leadership team’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary to fairly state our financial position as of May 2, 2026, and the results of operations for the three months ended May 2, 2026 and May 3, 2025.

Our current fiscal year, which consists of 52 weeks, ends on January 30, 2027 (“fiscal 2026”).

6 unchanged sentences

The accounting estimates and other matters we have assessed include, but were not limited to, sales return reserve, inventory reserve, allowance for doubtful accounts, goodwill, and intangible and other long-lived assets.

Our current assessment of these estimates is included in the condensed consolidated financial statements as of and for the three and nine months ended November 1, 2025.

Our current assessment of these estimates is included in the condensed consolidated financial statements as of and for the three months ended May 2, 2026.

As additional information becomes available to us, our future assessment of these estimates, as well as other factors, could change and the results of any such change could materially and adversely impact the condensed consolidated financial statements in future reporting periods.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025 (the “2024 Form 10-K”).

The results of operations for the three and nine months ended November 1, 2025, presented herein, are not necessarily indicative of the results to be expected for the full fiscal year.

10 | 2025 THIRD QUARTER FORM 10-Q

The results of operations for the three months ended May 2, 2026, presented herein, are not necessarily indicative of the results to be expected for the full fiscal year.

FINANCIAL INFORMATION

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NOTE 2—RECENTLY ISSUED ACCOUNTING STANDARDS

New Accounting Standards or Updates Adopted

Joint Venture Formations:

Recognition and Initial Measurement

In August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-05—Business Combinations—Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement (“ASU 2023-05”).

ASU 2023-05 applies to the formation of a “joint venture” or a “corporate joint venture” and requires a joint venture to initially measure all contributions received upon its formation at fair value.

The guidance does not impact accounting by the venturers.

We adopted this new guidance in the first quarter of fiscal 2025 on a prospective basis.

While ASU 2023-05 is not currently applicable to us because our existing arrangements in variable interest entities do not meet the definition of joint ventures in the updated standard, we will apply this guidance to any future arrangements we enter into that meet the definition of a joint venture.

Financial Instruments:

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”).

This new guidance provides all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets.

We adopted the ASU as of February 1, 2026 on a prospective basis and utilized the practical expedient, which did not have a material impact on our condensed consolidated financial statements.

New Accounting Standards or Updates Not Yet Adopted

Income Taxes:

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09—Improvements to Income Tax Disclosures (“ASU 2023-09”) .

This new guidance is designed to enhance the transparency and decision usefulness of income tax disclosures.

The amendments of this update are related to the rate reconciliation and income taxes paid, requiring consistent categories and greater disaggregation of information in the rate reconciliation as well as income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

We expect to include additional disclosures within the annual financial statements for the fiscal year ended January 31, 2026 to comply with the requirements of ASU 2023-09.

Income Statement:

5 unchanged sentences

The guidance is required to be adopted on a prospective basis and early adoption is permitted.

We are currently assessing the impact that adopting this ASU will have on the condensed consolidated financial statements .

Financial Instruments:

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets .

This new guidance provides all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets.

ASU 2025-05 is effective for fiscal years beginning after December 15, 2025.

We are currently assessing the impact that adopting this ASU will have on the condensed consolidated financial statements.

We are currently assessing the impact that adopting this ASU will have on our condensed consolidated financial statements.

Intangibles—Goodwill and Other—Internal-Use Software:

4 unchanged sentences

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027.

We are currently assessing the impact that adopting this ASU will have on the condensed consolidated financial statements.

FINANCIAL INFORMATION

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NOTE 3—BUSINESS COMBINATION

On July 8, 2025, we acquired a home furnishings business operating under the brand names of Formations and Dennis & Leen for total consideration of $ 32 million, funded through available cash.

The transaction was accounted for as a business combination under Accounting Standards Codification (“ASC”) 805— Business Combinations .

We believe that this addition to the RH platform further positions us as a leader in the luxury design market as we continue to enhance the RH product assortment.

During the nine months ended November 1, 2025, we incurred $ 2.3 million of acquisition-related costs associated with the transaction.

These costs include fees associated with financial, legal and accounting advisors, and are included in selling, general and administrative expenses on the condensed consolidated statements of income.

The following table summarizes the preliminary purchase price allocation based on the fair value of the assets acquired and liabilities assumed as of July 8, 2025:

(in thousands)

Merchandise inventories

Property and equipment

Operating lease right-of-use assets

Deferred revenue and customer deposits

Operating lease liabilities

Other liabilities

(1) Goodwill of $ 2.8 million, included in the RH Segment, represents the expected synergies from integrating the acquired business into our operations and is expected to be deductible for tax purposes.

The fair values assigned to assets acquired and liabilities assumed are preliminary based on our best estimates and assumptions as of the reporting date and may be subject to change as additional information is obtained within the measurement period (not to exceed 12 months from the acquisition date).

Results of operations of the acquired company have been included in our condensed consolidated statements of income since July 8, 2025, the acquisition date.

Pro forma results of the acquired business have not been presented as the results were not considered material to our condensed consolidated financial statements for all periods presented and would not have been material had the acquisition occurred at the beginning of fiscal 2024.

12 | 2025 THIRD QUARTER FORM 10-Q

We are currently assessing the impact that adopting this ASU will have on our condensed consolidated financial statements.

Interim Reporting:

Narrow-Scope Reporting

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Reporting (“ASU 2025-11”).

This new guidance clarifies and improves interim reporting guidance.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027.

We expect to comply with the amendments in this ASU beginning on the effective date.

FINANCIAL INFORMATION

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NOTE 3—PREPAID EXPENSE AND OTHER ASSETS

4 unchanged sentences

Vendor deposits

Capitalized cloud computing costs

Capitalized catalog costs

Tenant allowance receivable

Right of return asset for merchandise

Federal and state tax receivable

Promissory notes receivable, including interest (2)

Current portion of capitalized cloud computing costs

Right of return asset for merchandise

Tenant allowance receivable

Promissory note receivable, including interest (1)

Other current assets

Total prepaid expense and other current assets

(1) As of February 1, 2025, includes $ 19 million related to a federal tax receivable from a carryback claim.

(2) Represents promissory notes, including principal and accrued interest, due from an affiliate of the managing member of the Aspen LLCs.

(1) Represents a promissory note, including principal and accrued interest, due from an affiliate of the managing member of the Aspen LLCs.

Refer to Note 5— Variable Interest Entities .

4 unchanged sentences

Capitalized cloud computing costs—net (1)

Federal tax receivable—non-current (2)

Other deposits

Deferred financing fees

Vendor deposits—non-current

Deferred financing fees

Other non-current assets

Total other non-current assets

(1) Presented net of accumulated amortization of $ 40 million and $ 30 million as of November 1, 2025 and February 1, 2025, respectively.

(2) Represents a federal tax receivable from a carryback claim.

(1) Presented net of accumulated amortization of $ 47 million and $ 43 million as of May 2, 2026 and January 31, 2026, respectively.

FINANCIAL INFORMATION

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NOTE 4—GOODWILL, TRADENAMES, TRADEMARKS AND OTHER INTANGIBLE ASSETS

5 unchanged sentences

(in thousands)

February 1, 2025

January 31, 2026

Foreign currency translation

November 1, 2025

(1) Waterworks reporting unit goodwill of $ 51 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018.

(2) Presented net of an impairment charge of $ 35 million recognized in prior fiscal years.

(3) Represents disposals and amortization of patents.

(3) Represents amortization of patents.

There are no goodwill, tradenames, trademarks and other intangible assets for the Real Estate segment.

14 | 2025 THIRD QUARTER FORM 10-Q

FINANCIAL INFORMATION

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NOTE 5—VARIABLE INTEREST ENTITIES

Consolidated Variable Interest Entities and Noncontrolling Interests

In fiscal 2022, we formed eight privately-held limited liability companies (each, a “Member LLC” and collectively, the “Member LLCs” or the “consolidated variable interest entities”) with a third-party real estate developer affiliated with the managing member of the Aspen LLCs (as defined in “Equity Method Investments” below) for real estate development activities related to our Gallery transformation and global expansion strategies.

In fiscal 2024, one Member LLC became a wholly owned subsidiary and is no longer a VIE.

As of November 1, 2025 and February 1, 2025, of the remaining seven Member LLCs, we hold a 50 percent membership interest in six of the Member LLCs, and the remaining noncontrolling interest of 50 percent in each Member LLC is held by the same development partner.

In one Member LLC, we hold approximately 75 percent membership interest with the remaining noncontrolling interest of approximately 25 percent held by the same development partner.

As of May 2, 2026 and January 31, 2026, of the remaining seven Member LLCs, we hold a 50 percent membership interest in six of the Member LLCs, and the remaining noncontrolling interest of 50 percent in each Member LLC is held by the same developer.

In one Member LLC, we hold approximately 75 percent membership interest with the remaining noncontrolling interest of approximately 25 percent held by the same developer.

The carrying amounts and classification of the VIEs’ assets and liabilities included in the condensed consolidated balance sheets were as follows:

11 unchanged sentences

Total liabilities

(1) Includes $ 76 million and $ 54 million of construction in progress as of November 1, 2025 and February 1, 2025, respectively.

(1) Includes $ 21 million of construction in progress as of both May 2, 2026 and January 31, 2026.

(2) On September 9, 2022, a Member LLC as the borrower executed a Promissory Note (the “Promissory Note”) with a third-party bank in an aggregate principal amount equal to $ 16 million with a maturity date of September 9, 2032.

2 unchanged sentences

Equity Method Investments

Equity method investments primarily represent our membership interests in three privately-held limited liability companies in Aspen, Colorado (each, an “Aspen LLC” and collectively, the “Aspen LLCs”) that were formed for the purpose of acquiring, developing, operating and selling certain real estate projects in Aspen, Colorado.

Equity method investments primarily represent our membership interests in three privately-held limited liability companies in Aspen, Colorado (each, an “Aspen LLC” and collectively, the “Aspen LLCs” or the “equity method investments”) that were formed for the purpose of acquiring, developing, operating and selling certain real estate projects in Aspen, Colorado.

Additionally, Waterworks has membership interests in two European entities that are equity method investments.

FINANCIAL INFORMATION

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In March 2025, the Aspen LLC in which we hold a 70 percent interest sold its sole real estate property.

Subsequent to the property sale, we received $ 15 million from the Aspen LLC, which consisted of $ 2.9 million for the repayment of its outstanding promissory note to us, including accrued interest, and a capital distribution of $ 13 million.

The capital distribution of $ 13 million represented a return of our contributed capital of $ 7.9 million and a return on investment of $ 4.6 million, which are included within cash flows from investing activities and cash flows from operating activities, respectively, on the condensed consolidated statements of cash flows.

Following this capital distribution, the remaining net assets in this Aspen LLC are immaterial.

Other than as described above, we did no t receive any distributions or have any undistributed earnings of equity method investments during the three or nine months ended November 1, 2025 and November 2, 2024.

Our maximum exposure to loss is the carrying value of each of the equity method investments as of November 1, 2025.

The capital distribution of $ 13 million represented a return of our contributed capital of $ 7.9 million and a return on investment of $ 4.6 million.

Other than as described above, we did not receive any distributions or have any undistributed earnings of equity method investments during the three months ended May 2, 2026 and May 3, 2025.

Our maximum exposure to loss is the carrying value of each of the equity method investments as of May 2, 2026.

NOTE 6—ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

3 unchanged sentences

Accrued compensation

Accrued sales and use tax

Accrued sales, use and other indirect tax

Accrued occupancy

7 unchanged sentences

(in thousands)

Allowance for sales returns

Current portion of term loans

Allowance for sales returns

Finance lease liabilities

Unredeemed gift card and merchandise credit liability

Federal tax payable

Foreign tax payable

1 unchanged sentence

Total other current liabilities

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FINANCIAL INFORMATION

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Supplier Finance Program

We facilitate a voluntary supply chain financing program (the “Financing Program”) with a third-party financial institution (the “Bank”) to provide participating suppliers with the opportunity to receive early payment on invoices, net of a discount charged to the supplier by the Bank.

As of November 1, 2025 and February 1, 2025, we had $ 21 million and $ 35 million, respectively, of payment obligations outstanding under the Financing Program included in accounts payable and accrued expenses on the condensed consolidated balance sheets.

Reorganization

We implemented and completed a restructuring in the fourth quarter of fiscal 2024 and in the second quarter of fiscal 2025 that included workforce and expense reductions in order to improve and simplify our organizational structure, streamline certain aspects of our business operations and better position us for further growth.

The workforce reduction associated with these initiatives included the elimination of numerous leadership and other positions throughout the organization.

During the nine months ended November 1, 2025, we incurred total charges relating to the reorganization of $ 1.2 million, consisting primarily of severance costs and related taxes.

As of November 1, 2025 and February 1, 2025, we had accruals of $ 0.8 million and $ 3.4 million, respectively, included within accounts payable and accrued expenses on the condensed consolidated balance sheets related to the reorganizations.

As of May 2, 2026 and January 31, 2026, we had $ 37 million and $ 31 million, respectively, of payment obligations outstanding under the Financing Program included in accounts payable and accrued expenses on the condensed consolidated balance sheets.

Contract Liabilities

We defer revenue associated with merchandise delivered via the home-delivery channel.

We expect that substantially all of the deferred revenue and customer deposits as of November 1, 2025 will be recognized within the next six months as the performance obligations are satisfied.

We expect that substantially all of the deferred revenue and customer deposits as of May 2, 2026 will be recognized within the next six months as the performance obligations are satisfied.

In addition, we defer revenue when cash payments are received in advance of performance for unsatisfied obligations related to our gift cards.

During the three months ended November 1, 2025 and November 2, 2024, we recognized $ 4.5 million and $ 4.6 million, respectively, of revenue related to previous deferrals related to our gift cards .

During the nine months ended November 1, 2025 and November 2, 2024, we recognized $ 16 million and $ 15 million, respectively, of revenue related to previous deferrals related to our gift cards .

During the three months ended May 2, 2026 and May 3, 2025, we recognized $ 5.7 million and $ 6.5 million, respectively, of revenue related to previous deferrals related to our gift cards .

We expect that approximately 75 percent of the remaining gift card liabilities will be recognized when the gift cards are redeemed by customers.

2 unchanged sentences

THREE MONTHS ENDED

NINE MONTHS ENDED

(in thousands)

6 unchanged sentences

Total lease costs—net

(1) Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of income based on our accounting policy.

(2) Included in interest expense—net on the condensed consolidated statements of income.

(2) Included in interest expense—net on the condensed consolidated statements of income (loss).

Amounts include lease cost related to variable lease payments based on an index or rate that were not included in the measurement of the initial lease liability and right-of-use asset for finance leases, which were not material in either period presented.

Other variable costs, which include single lease cost related to variable lease payments based on an index or rate that were not included in the measurement of the initial lease liability and right-of-use asset, were not material in either period presented.

(4) Included in selling, general and administrative expenses on the condensed consolidated statements of income (loss).

FINANCIAL INFORMATION

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(3) Represents variable lease payments under operating and finance lease agreements, primarily associated with contingent rent based on a percentage of retail sales over contractual levels of $ 3.5 million and $ 2.2 million for the three months ended November 1, 2025 and November 2, 2024, respectively, and $ 12 million and $ 9.7 million for the nine months ended November 1, 2025 and November 2, 2024, respectively, as well as charges associated with common area maintenance of $ 2.2 million and $ 2.6 million for the three months ended November 1, 2025 and November 2, 2024, respectively, and $ 7.7 million and $ 8.2 million for the nine months ended November 1, 2025 and November 2, 2024, respectively.

(4) Included in selling, general and administrative expenses on the condensed consolidated statements of income.

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Lease right-of-use assets and lease liabilities consisted of the following:

(in thousands)

BALANCE SHEET CLASSIFICATION

(in thousands)

Operating leases (1)

14 unchanged sentences

Total lease liabilities

(1) Includes $ 41 million as of both May 2, 2026 and January 31, 2026 related to a future RH Design Gallery lease where the landlord is one of the Aspen LLCs.

Refer to Note 5— Variable Interest Entities .

(2) Includes capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement.

(2) Recorded net of accumulated amortization of $ 366 million and $ 320 million as of November 1, 2025 and February 1, 2025, respectively.

(3) Includes $ 33 million and $ 35 million as of November 1, 2025 and February 1, 2025, respectively, related to an RH Design Gallery lease with a landlord that is an affiliate of the managing member of the Aspen LLCs.

(3) Recorded net of accumulated amortization of $ 401 million and $ 384 million as of May 2, 2026 and January 31, 2026, respectively.

(4) Includes $ 32 million and $ 33 million as of May 2, 2026 and January 31, 2026, respectively, related to an RH Design Gallery lease with a landlord that is an affiliate of the managing member of the Aspen LLCs.

Refer to Note 5— Variable Interest Entities .

(5) Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months.

18 | 2025 THIRD QUARTER FORM 10-Q

FINANCIAL INFORMATION

The maturities of lease liabilities were as follows as of November 1, 2025:

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The maturities of lease liabilities were as follows as of May 2, 2026:

(in thousands)

5 unchanged sentences

(1) Total lease payments include future obligations for renewal options that are reasonably certain to be exercised and are included in the measurement of the lease liability.

Total lease payments exclude $ 696 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of November 1, 2025, of which $ 5.6 million, $ 29 million, $ 36 million, $ 38 million, $ 41 million and $ 41 million will be paid in the remainder of fiscal 2025, fiscal 2026, fiscal 2027, fiscal 2028, fiscal 2029 and fiscal 2030, respectively, and $ 505 million will be paid subsequent to fiscal 2030.

Total lease payments exclude $ 578 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of May 2, 2026, of which $ 17 million, $ 29 million, $ 32 million, $ 34 million, $ 35 million and $ 35 million will be paid in the remainder of fiscal 2026, fiscal 2027, fiscal 2028, fiscal 2029, fiscal 2030 and fiscal 2031, respectively, and $ 396 million will be paid subsequent to fiscal 2031.

(2) Excludes an immaterial amount of future commitments under short-term lease agreements.

1 unchanged sentence

Supplemental information related to leases consisted of the following:

NINE MONTHS ENDED

THREE MONTHS ENDED

Weighted-average remaining lease term (years)

5 unchanged sentences

FINANCIAL INFORMATION

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2026 FIRST QUARTER FORM 10-Q | 17

Other information related to leases consisted of the following:

NINE MONTHS ENDED

THREE MONTHS ENDED

(in thousands)

9 unchanged sentences

Reclassification from other non-current assets to finance lease right-of-use assets

(1) Presented net of tenant allowances received subsequent to lease commencement of $ 15 million in the nine months ended November 1, 2025.

We did not receive any such tenant allowances in the nine months ended November 2, 2024.

(2) Right-of-use assets obtained in exchange for new operating lease liabilities exclude the impact from acquisitions of $ 4.3 million for the nine months ended November 1, 2025.

Refer to Note 3— Business Combinations .

Long-Lived Asset Impairment

During the three months ended November 2, 2024, we recognized long-lived asset impairment charges of $ 19 million for our two Design Galleries in Germany due to the asset carrying value of each location exceeding the estimated fair market value of the long-lived assets over their respective remaining lease terms, both of which end in 2027.

These impairment charges were comprised of lease right-of-use asset impairment of $ 13 million and property and equipment impairment of $ 5.6 million.

NOTE 9—CREDIT FACILITIES AND CONVERTIBLE SENIOR NOTES

Reclassification from other non-current assets to operating lease right-of-use assets

(1) Presented net of tenant allowances received subsequent to lease commencement of $ 1.4 million in the three months ended May 3, 2025.

No such amounts were received from landlords in the three months ended May 2, 2026.

NOTE 8—CREDIT FACILITIES

The outstanding balances under our credit facilities were as follows:

4 unchanged sentences

Total credit facilities

(1) Deferred financing fees associated with the asset based credit facility as of November 1, 2025 and February 1, 2025 were $ 3.7 million and $ 1.5 million, respectively, and are included in other non-current assets on the condensed consolidated balance sheets.

(1) Deferred financing fees associated with the asset based credit facility as of May 2, 2026 and January 31, 2026 were $ 3.0 million and $ 3.4 million, respectively, and are included in other non-current assets on the condensed consolidated balance sheets.

The deferred financing fees are amortized on a straight-line basis over the life of the revolving line of credit.

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entered into an amendment to the ABL Credit Agreement (defined below), which extended the maturity date of the revolving line of credit from July 29, 2026 to the earlier of (a) July 31, 2030 and (b) the date which is 91 days prior to the final stated maturity of the Term Loan Credit Agreement and any refinancing thereof.

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(2) Represents the Term Loan Credit Agreement (defined below), of which outstanding amounts of $ 1,890 million and $ 1,895 million were included in term loan B—net on the condensed consolidated balance sheets as of May 2, 2026 and January 31, 2026, respectively, and $ 20 million of current maturities of long-term debt was included in other current liabilities on the condensed consolidated balance sheets as of both May 2, 2026 and January 31, 2026.

(3) Represents the outstanding balance of the Term Loan B-2 (defined below) under the Term Loan Credit Agreement, of which outstanding amounts of $ 478 million and $ 479 million were included in term loan B-2—net on the condensed consolidated balance sheets as of May 2, 2026 and January 31, 2026, respectively, and $ 5.0 million of current maturities of long-term debt was included in other current liabilities on the condensed consolidated balance sheets as of both May 2, 2026 and January 31, 2026.

FINANCIAL INFORMATION

(2) Represents the Term Loan Credit Agreement (defined below), of which outstanding amounts of $ 1,900 million and $ 1,915 million were included in term loan B—net on the condensed consolidated balance sheets as of November 1, 2025 and February 1, 2025, respectively, and $ 20 million was included in other current liabilities on the condensed consolidated balance sheets as of both November 1, 2025 and February 1, 2025.

(3) Represents the outstanding balance of the Term Loan B-2 (defined below) under the Term Loan Credit Agreement, of which outstanding amounts of $ 480 million and $ 484 million were included in term loan B-2—net on the condensed consolidated balance sheets as of November 1, 2025 and February 1, 2025, respectively, and $ 5.0 million was included in other current liabilities on the condensed consolidated balance sheets as of both November 1, 2025 and February 1, 2025.

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Asset Based Credit Facility

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(“RHI”), a wholly owned subsidiary of RH, along with its Canadian subsidiary, Restoration Hardware Canada, Inc., entered into the Ninth Amended and Restated Credit Agreement (as amended prior to June 28, 2017, the “Original Credit Agreement”) by and among RHI, Restoration Hardware Canada, Inc., certain other subsidiaries of RH named therein as borrowers or guarantors, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (the “ABL Agent”).

On June 28, 2017, RHI entered into the Eleventh Amended and Restated Credit Agreement (as amended prior to July 29, 2021, the “11 th A&R Credit Agreement”) by and among RHI, Restoration Hardware Canada, Inc., certain other subsidiaries of RH named therein as borrowers or guarantors, the lenders party thereto and the ABL Agent, which amended and restated the Original Credit Agreement.

On July 29, 2021, RHI entered into the Twelfth Amended and Restated Credit Agreement (as amended, the “ABL Credit Agreement”) by and among RHI, Restoration Hardware Canada, Inc., certain other subsidiaries of RH named therein as borrowers or guarantors, the lenders party thereto and the ABL Agent, which amended and restated the 11 th A&R Credit Agreement.

On July 31, 2025, RHI entered into an Amendment (the “Amendment”) to the Twelfth Amended and Restated Credit Agreement, (as amended prior to the Amendment, the “Existing ABL Credit Agreement” and as amended by the Amendment, the “ABL Credit Agreement”).

The Amendment, among other things, amends the ABL Credit Agreement to extend the maturity date of the ABL Credit Agreement to be the earlier of (a) July 31, 2030 and (b) the date which is 91 days prior to the final stated maturity of the Term Loan Credit Agreement and any refinancing thereof.

On July 31, 2025, RHI entered into an Amendment (the “Amendment”) to the Original Credit Agreement, as it had been subsequently amended (as amended by the Amendment, the “ABL Credit Agreement”).

The Amendment, among other things, amends the Original Credit Agreement to extend the maturity date of the ABL Credit Agreement to be the earlier of (a) July 31, 2030 and (b) the date which is 91 days prior to the final stated maturity of the Term Loan Credit Agreement and any refinancing thereof.

Under the ABL Credit Agreement, RHI has a revolving line of credit with initial availability of up to $ 600 million, of which (i) $ 10 million is available to the RH subsidiary, Restoration Hardware Canada, Inc., and (ii) $ 100 million is available to the RH subsidiary, RH Geneva Sàrl.

7 unchanged sentences

Borrowings under the revolving line of credit (other than swing line loans, which are subject to interest at the base rate) bear interest, at the borrower’s option, at either the base rate or the Secured Overnight Financing Rate (“SOFR”) subject to a 0.00 % SOFR floor (or, in the case of the Canadian borrowings, the “BA Rate” or the “Canadian Prime Rate”, as such terms are defined in the ABL Credit Agreement, for the Canadian borrowings denominated in Canadian dollars, or the “U.S.

Index Rate”, as such term is defined in the ABL Credit Agreement, or SOFR for Canadian borrowings denominated in United States dollars) plus an applicable interest rate margin, in each case.

FINANCIAL INFORMATION

2025 THIRD QUARTER FORM 10-Q | 21

Index Rate”, as such term is defined in the ABL Credit Agreement, or SOFR for Canadian borrowings denominated in U.S.

dollars) plus an applicable interest rate margin, in each case.

The ABL Credit Agreement contains various restrictive and affirmative covenants, including required financial reporting, limitations on granting certain liens, limitations on making certain loans or investments, limitations on incurring additional debt, restricted payment limitations limiting the payment of dividends and certain other transactions and distributions, limitations on transactions with affiliates, along with other restrictions and limitations similar to those frequently found in credit agreements of a similar type and size.

2 unchanged sentences

The FCCR Covenant ratio is set at 1.0 and measured on a trailing twelve-month basis.

As of November 1, 2025, RHI was in compliance with the FCCR Covenant.

As of May 2, 2026, RHI was in compliance with the FCCR Covenant.

The ABL Credit Agreement requires a daily sweep of all cash receipts and collections to prepay the loans under the agreement while (i) an event of default exists or (ii) when the unused availability under the ABL Credit Agreement drops below the greater of (A) $ 40 million and (B) an amount based on 10 % of the total borrowing availability at the time.

The ABL Credit Agreement contains customary representations and warranties, events of default and other customary terms and conditions for an asset based credit facility.

As of November 1, 2025, RHI had $ 65 million in outstanding borrowings and $ 428 million of availability under the revolving line of credit, net of $ 48 million in outstanding letters of credit.

As a result of the FCCR Covenant that limits the last 10 % of borrowing availability, actual incremental borrowing available to RHI and the other affiliated parties under the revolving line of credit would be $ 368 million as of November 1, 2025.

FINANCIAL INFORMATION

2026 FIRST QUARTER FORM 10-Q | 19

As of May 2, 2026, RHI had $ 30 million in outstanding borrowings and $ 361 million of availability under the revolving line of credit, net of $ 44 million in outstanding letters of credit.

Term Loan Credit Agreement

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Other than the terms relating to the Term Loan B-2, the terms of the Amended Term Loan Credit Agreement remain substantially the same as the terms of the existing Term Loan Credit Agreement, including representations and warranties, covenants and events of default.

22 | 2025 THIRD QUARTER FORM 10-Q

FINANCIAL INFORMATION

All obligations under the Term Loan B are guaranteed by certain domestic subsidiaries of RHI.

7 unchanged sentences

The Term Loan Credit Agreement contains customary representations and warranties, events of default and other customary terms and conditions for a term loan credit agreement.

$ 350 million 0.00 % Convertible Senior Notes due 2024

In September 2019, we issued in a private offering $ 350 million principal amount of 0.00 % convertible senior notes due 2024 (the “2024 Notes”).

In September 2024, upon the maturity of the 2024 Notes, the $ 42 million in aggregate principal amount of the 2024 Notes settled for $ 42 million in cash and were no longer outstanding as of February 1, 2025.

During the nine months ended November 2, 2024 through the maturity of the 2024 Notes, we issued in aggregate 39,121 shares of common stock at a par value of $ 0.0001 per share and, as a result, recognized $ 0 in additional paid-in capital on the condensed consolidated statements of stockholders’ equity (deficit) upon settlement of the 2024 Notes.

FINANCIAL INFORMATION

2025 THIRD QUARTER FORM 10-Q | 23

2026 FIRST QUARTER FORM 10-Q | 20

NOTE 9—FAIR VALUE MEASUREMENTS

2 unchanged sentences

The estimated fair value of the asset based credit facility approximates cost as the interest rate associated with the facility is variable and resets frequently (Level 2).

The estimated fair value and carrying value of the Term Loan Credit Agreement and the real estate loans were as follows:

The estimated fair value and carrying value of the Term Loan Credit Agreement and the real estate loan were as follows:

(in thousands)

Term loan B-2

Real estate loans

Real estate loan

(1) The principal carrying values of the Term Loan B and Term Loan B-2 represent the outstanding amount under each class and exclude discounts upon original issuance and third-party offering costs.

The principal carrying value of the real estate loans represents the outstanding principal balance and exclude debt issuance costs.

The principal carrying value of the real estate loan represents the outstanding principal balance and excludes debt issuance costs.

The fair values of the Term Loan B and Term Loan B-2 were derived from observable bid prices (Level 1).

The fair values of the real estate loans were derived from discounted cash flows using risk-adjusted rates (Level 2).

The fair value of the real estate loan was derived from discounted cash flows using risk-adjusted rates (Level 2).

NOTE 10—INCOME TAXES

Our income tax expense and effective tax rates were as follows:

Our income tax expense (benefit) and effective tax rates were as follows:

THREE MONTHS ENDED

NINE MONTHS ENDED

(dollars in thousands)

Income tax expense

Income tax expense (benefit)

Effective tax rate

The increase in our effective tax rates for the three and nine months ended November 1, 2025 compared to the three and nine months ended November 2, 2024 is primarily attributable to reporting higher net income in the current year and the impact of higher net excess tax benefits from stock-based compensation in fiscal 2024.

The Organization for Economic Cooperation and Development (“OECD”) proposed model rules to ensure a minimal level of taxation (commonly referred to as Pillar II) and the European Union member states have agreed to implement Pillar II’s proposed global corporate minimum tax rate of 15 % .

Many countries are actively considering, have proposed or have enacted, changes to their tax laws based upon the Pillar II proposals, which could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.

To mitigate the administrative burden for multinational enterprises in complying with the OECD Global Anti-Base Erosion rules during the initial years of implementation, the OECD developed the temporary “Transitional Country-by-Country Safe Harbor.” We considered the applicable tax law changes from Pillar II implementation in the relevant countries in which we operate, and there is no material impact to our tax provision for the three and nine months ended November 1, 2025.

We will continue to evaluate the impact of these tax law changes in future reporting periods.

24 | 2025 THIRD QUARTER FORM 10-Q

FINANCIAL INFORMATION

On July 4, 2025, the United States enacted tax legislation through the H.R.1 Reconciliation Act, commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”), which implemented several corporate tax law changes, including, but not limited to, (1) limitations on deductions for interest expense, (2) changes to the taxation of foreign activity and (3) reinstatement of one hundred percent bonus depreciation for eligible property.

A number of other provisions of the OBBBA will not take effect until the 2026 tax year, including various changes to existing international tax provisions.

We did not identify any material discrete tax impacts related to our beginning-of-the-year deferred tax assets and liabilities or valuation allowances due to the enactment of the OBBBA.

The increase in our effective tax rate for the three months ended May 2, 2026 compared to the three months ended May 3, 2025 is primarily attributable to the net loss in the current period, as well as the discrete tax impact of the favorable legal settlement associated with credit card interchange fees and net excess tax windfalls from stock-based compensation in the three months ended May 2, 2026 as compared to net tax shortfalls in the three months ended May 3, 2025.

The impacts of the OBBBA are reflected in our results for the quarter ended May 2, 2026.

We will continue to monitor any future changes in our business or interpretations of the new tax law that could affect our tax position in subsequent periods.

NOTE 12—NET INCOME PER SHARE

The weighted-average shares used for net income per share were as follows:

FINANCIAL INFORMATION

2026 FIRST QUARTER FORM 10-Q | 21

NOTE 11—NET INCOME (LOSS) PER SHARE

The weighted-average shares used for net income (loss) per share were as follows:

THREE MONTHS ENDED

NINE MONTHS ENDED

Weighted-average shares—basic

Effect of dilutive stock-based awards

Effect of dilutive convertible senior notes (1)

Weighted-average shares—diluted

(1) The dilutive effect of the 2024 Notes is calculated under the if-converted method, which assumes share settlement of the entire convertible debt instrument.

The 2024 Notes matured in September 2024 and did not have an impact on our diluted share count post-maturity.

Refer to Note 9— Credit Facilities and Convertible Senior Notes .

The following number of options and restricted stock units were excluded from the calculation of diluted net income per share because their inclusion would have been anti-dilutive:

(1) As we reported a net loss for the three months ended May 2, 2026, the weighted-average shares outstanding for basic and diluted are the same for the corresponding period.

The following number of options and restricted stock units were excluded from the calculation of diluted net income (loss) per share because their inclusion would have been anti-dilutive:

THREE MONTHS ENDED

NINE MONTHS ENDED

Restricted stock units

NOTE 12—STOCK-BASED COMPENSATION

The Restoration Hardware 2012 Stock Incentive Plan (the “Stock Incentive Plan”) was adopted on November 1, 2012.

The Stock Incentive Plan provided for the grant of incentive stock options to our employees, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, cash-based awards and any combination thereof to our employees, directors and consultants and our parent and subsidiary corporations’ employees, directors and consultants.

The Restoration Hardware 2012 Stock Option Plan (the “Option Plan”) was adopted on November 1, 2012.

On November 1, 2022, both the Stock Incentive Plan and Option Plan expired.

The RH 2023 Stock Incentive Plan (the “2023 Stock Incentive Plan”, together with the Stock Incentive Plan and Option Plan, “the Plans”) was approved by stockholders on April 4, 2023.

The 2023 Stock Incentive Plan provides for the grant of incentive stock options to our employees and the grant of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights and any combination thereof to our employees, directors and consultants and our parent and subsidiary corporations’ employees, directors and consultants.

As of November 1, 2025, there were a total of 1,958,647 shares issuable under the 2023 Stock Incentive Plan.

Awards under the 2023 Stock Incentive Plan reduce the number of shares available for future issuance.

Cancellations and forfeitures of awards previously granted under the Plans increase the number of shares available for future issuance.

Shares issued as a result of award exercises under the 2023 Stock Incentive Plan will be funded with the issuance of new shares.

FINANCIAL INFORMATION

2025 THIRD QUARTER FORM 10-Q | 25

We maintain two stock incentive plans, the 2012 Stock Incentive Plan and the 2023 Stock Incentive Plan (collectively, the “Plans”), that provide for the grant of incentive stock options to our employees and the grant of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights and any combination thereof to our employees, directors and consultants and our parent and subsidiary corporations’ employees, directors and consultants.

As of May 2, 2026, there were a total of 1,415,103 shares issuable under the 2023 Stock Incentive Plan.

Equity Awards Under the Plans

Options outstanding, vested or expected to vest, and exercisable as of November 1, 2025 were as follows:

Options outstanding, vested or expected to vest, and exercisable as of May 2, 2026 were as follows:

REMAINING TERM

3 unchanged sentences

Options exercisable

Stock-based compensation expense, which is included in selling, general and administrative expenses on the condensed consolidated statements of income, was as follows:

Stock-based compensation, which is included in selling, general and administrative expenses on the condensed consolidated statements of income (loss), was as follows:

THREE MONTHS ENDED

NINE MONTHS ENDED

(in thousands)

Stock-based compensation expense (1)

(1) On October 18, 2020, our Board of Directors granted Mr.

Friedman an option to purchase 700,000 shares of our common stock with an exercise price equal to $ 385.30 per share under the Stock Incentive Plan.

The option resulted in aggregate non-cash stock compensation expense of $ 174 million, of which $ 0.9 million and $ 3.7 million was recognized during the nine months ended November 1, 2025 and November 2, 2024, respectively .

Compensation expense for this award was fully recognized as of the first quarter of fiscal 2025.

No stock-based compensation cost has been capitalized in the accompanying condensed consolidated financial statements.

As of November 1, 2025, the total unrecognized compensation expense and weighted average remaining term of equity awards were as follows:

Stock-based compensation

FINANCIAL INFORMATION

2026 FIRST QUARTER FORM 10-Q | 22

No stock-based compensation has been capitalized in the accompanying condensed consolidated financial statements.

As of May 2, 2026, the total unrecognized stock-based compensation and weighted-average remaining term of unvested awards were as follows:

REMAINING TERM

3 unchanged sentences

NOTE 13—COMMITMENTS AND CONTINGENCIES

We had no material off-balance sheet commitments as of November 1, 2025.

We had no material off-balance sheet commitments as of May 2, 2026.

Contingencies

2 unchanged sentences

In addition, we are subject to governmental and regulatory examinations, information requests, and investigations from time to time at the state and federal levels.

26 | 2025 THIRD QUARTER FORM 10-Q

FINANCIAL INFORMATION

We currently face legal proceedings that involve complex litigation, including class action cases, matters related to our employment practices, the application of state wage and hour laws, product liability and other causes of action.

We currently face certain legal proceedings that involve complex litigation, including class action cases, matters related to our employment practices, the application of state wage-and-hour laws, product liability and other causes of action.

We have faced similar litigation in the past.

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Although we believe that the ultimate resolution of our current legal proceedings will not have a material adverse effect on the condensed consolidated financial statements, the outcome of legal matters is subject to inherent uncertainty.

FINANCIAL INFORMATION

2026 FIRST QUARTER FORM 10-Q | 23

Although we are self-insured or maintain deductibles in the United States for workers’ compensation, general liability and product liability up to predetermined amounts, above which third-party insurance applies, depending on the facts and circumstances of the underlying claims, coverage under these or other of our insurance policies may not be available.

4 unchanged sentences

Legal costs related to such matters are expensed as incurred.

Gain Contingencies

In February 2026, we entered into a settlement agreement to resolve litigation pertaining to credit card interchange fees in which we received $ 32 million, net of legal costs, in March 2026.

We recognized this settlement as a gain within selling, general and administrative expenses on the condensed consolidated statements of income (loss) for the three months ended May 2, 2026.

In February 2026, the U.S.

Supreme Court invalidated certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”).

Subsequently, new tariffs were imposed pursuant to alternative statutory authority and are scheduled to expire after 150 days absent Congressional authorization.

In April 2026, the IEEPA refund process was launched at which time we filed for refunds for tariffs previously paid in an aggregate amount of $ 69 million.

We began to receive tariff refunds in the second quarter of fiscal 2026, and, to date, have received refunds of approximately $ 9 million, inclusive of interest.

Given the evolving trade policy environment and uncertainty related to the recoverability or timing of refunds we believe may be due to us, we plan to recognize such refunds once they are realized or realizable and are evaluating the impact of these actions on our condensed consolidated financial statements.

NOTE 14—SEGMENT REPORTING

3 unchanged sentences

The RH Segment and Waterworks operating segments (the “retail operating segments”) include all sales channels accessed by our customers, including sales through retail locations and outlets, including hospitality, websites, Sourcebooks, and the Trade and Contract channels.

The Real Estate segment represents operations associated with certain of our equity method investments and consolidated VIEs that have operations, which are not directly related to the activities of the retail operating segments.

The Real Estate segment represents operations associated with certain of our equity method investments and consolidated VIEs that have operations not directly related to the activities of the retail operating segments.

The retail operating segments are strategic business units that offer products for the home furnishings customer.

While RH Segment and Waterworks have a shared senior leadership team and customer base, we have determined that their results cannot be aggregated as they do not share similar economic characteristics, as well as due to other quantitative factors.

FINANCIAL INFORMATION

2025 THIRD QUARTER FORM 10-Q | 27

Segment Information

The CODM uses segment adjusted operating income to evaluate segment profitability for the retail operating segments and to allocate resources and analyze variances of actual performance to our forecasts when making decisions.

Operating income is defined as net income before interest expense—net, other (income) expense—net, income tax expense and our share of equity method investments (income) loss—net.

Segment adjusted operating income excludes (i) certain asset impairments, (ii) product recall, (iii) severance costs associated with a reorganization, (iv) non-cash compensation amortization related to an option grant made to Mr.

Friedman in October 2020, (v) contract termination settlement—net and (vi) legal settlements—net.

These items are excluded from segment adjusted operating income in order to provide better transparency of segment operating results.

Operating income is defined as net income (loss) before interest expense—net, other (income) expense—net, income tax expense (benefit) and our share of equity method investments net (income) loss.

Segment adjusted operating income (loss) excludes (i) legal settlement—net and (ii) non-cash compensation amortization related to an option grant made to Mr.

Friedman in October 2020, which stock-based compensation for this award was fully recognized as of the first quarter of fiscal 2025.

These items are excluded from segment adjusted operating income (loss) in order to provide better transparency of segment operating results.

Accordingly, these items are not presented by segment because they are excluded from the segment profitability measure that the CODM and our senior leadership team review.

28 | 2025 THIRD QUARTER FORM 10-Q

FINANCIAL INFORMATION

Segment net revenues, which represent our disaggregated net revenues in accordance with ASC 606, significant segment expenses and segment adjusted operating income, by reportable segment, were as follows:

2026 FIRST QUARTER FORM 10-Q | 24

Segment net revenues, which represent our disaggregated net revenues in accordance with Accounting Standards Codification 606, significant segment expenses and segment adjusted operating income (loss), by reportable segment, were as follows:

THREE MONTHS ENDED

NINE MONTHS ENDED

(in thousands)

2 unchanged sentences

Other segment expenses (2)

Segment adjusted operating income (1)

Asset impairments

Product recall

Reorganization related costs

Segment adjusted operating income (loss)

Legal settlement—net

Non-cash compensation

Contract termination settlement—net

Legal settlements—net

Operating income

1 unchanged sentence

Other (income) expense—net

Income before taxes and equity method investments

(1) All intercompany transactions are immaterial and have been eliminated.

Income (loss) before income taxes and equity method investments

(1) All intercompany transactions are not material and have been eliminated.

(2) Other segment expenses primarily include compensation and occupancy costs classified as selling, general and administrative expenses, and other general and administrative expenses.

FINANCIAL INFORMATION

2025 THIRD QUARTER FORM 10-Q | 29

In the three months ended November 1, 2025 and November 2, 2024, the Real Estate segment share of equity method investments loss, which is the measure of segment profitability reviewed by the CODM to evaluate performance internally for the Real Estate segment, was $ 0.4 million and $ 1.8 million, respectively.

In the nine months ended November 1, 2025 and November 2, 2024, the Real Estate segment share of equity method investment operations was income of $ 6.2 million and loss of $ 8.5 million, respectively.

The share of (income) loss from equity method investments for the Waterworks segment was immaterial in all fiscal periods presented.

In the three months ended May 2, 2026 and May 3, 2025, the Real Estate segment share of equity method investments, which is the measure of segment profitability reviewed by the CODM to evaluate performance internally for the Real Estate segment, was a loss of $ 0.6 million and income of $ 8.3 million, respectively.

The share of (income) loss from equity method investments for the Waterworks segment was immaterial in both fiscal periods presented.

Depreciation and amortization for our segments was as follows:

THREE MONTHS ENDED

NINE MONTHS ENDED

(in thousands)

2 unchanged sentences

(1) There is no depreciation and amortization for the Real Estate segment since all assets represent construction in progress.

FINANCIAL INFORMATION

2026 FIRST QUARTER FORM 10-Q | 25

Balance sheet information for our segments consisted of the following:

TRADEMARKS AND

OTHER INTANGIBLE

EQUITY METHOD

(in thousands)

Tradenames, trademarks and other intangible assets (2)

Equity method investments (3)

January 31, 2026

(1) The Waterworks reporting unit goodwill of $ 51 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018.

(2) The Waterworks reporting unit tradename is presented net of an impairment charge of $ 35 million recognized in prior fiscal years.

(3) The Waterworks segment balance represents membership interests in two European entities, one entity in which we hold a 50 percent membership interest and another entity in which we increased our membership interest from approximately 25 percent as of February 1, 2025 to approximately 28 percent as of November 1, 2025.

We are not the primary beneficiary of either of these VIEs.

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FINANCIAL INFORMATION

We are domiciled in the United States and primarily operate our retail locations and outlets in the United States.

As of November 1, 2025, we operated the following number of retail locations and outlets outside the United States:

As of May 2, 2026, we operated the following number of retail locations and outlets outside the United States:

United Kingdom

(1) Geographic revenues generated outside of the United States did not exceed 10% of total consolidated net revenues in either fiscal period presented.

NOTE 15—SUBSEQUENT EVENT

In May 2026, we received a $ 50 million cash distribution related to our membership interests in the Aspen LLCs, which resulted from a series of transactions whereby ownership of certain real estate properties held by the Aspen LLCs were transferred to entities wholly owned by the managing member of the Aspen LLCs and one property, which we plan to open as an RH Guesthouse, was transferred to an entity wholly owned by us.

Following this distribution, we repaid $ 32 million of outstanding debt on the wholly owned property transferred to us.

Additionally, we received $ 10 million of deemed non-cash capital contributions in an Aspen LLC.

Concurrently with these transactions, the membership interests in the seven Member LLCs that were previously held by a third-party real estate developer affiliated with the managing member of the Aspen LLCs were withdrawn, and, as a result, we wholly own such Member LLCs.

We are evaluating the effect these transactions will have on our condensed consolidated financial statements.

FINANCIAL INFORMATION

2026 FIRST QUARTER FORM 10-Q | 26

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements